Fund Finance
At Turning Point, we specialise in fund finance, offering tailored solutions to meet the unique needs of private equity, real estate, and other alternative investment funds.
We screen your borrowing needs against a database of over 300 lender profiles, each containing up to 25 data points. Through digital debt intermediation, we can independently verify existing lender terms or streamline your lender search, saving significant time and costs compared to traditional methods. Our team of fund finance experts identify the most suitable providers and terms for you against over 300 lenders focused on the mid market debt and equity sector.
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WHAT IS FUND FINANCE?
Fund finance encompasses various credit facilities that investment funds utilise to optimise liquidity, streamline capital deployment, and enhance returns. These financing solutions are integral to the operations of private equity, real estate, infrastructure, and other private market funds.
Common Fund Finance Facilities
Subscription Line Facilities (Capital Call Facilities)
These are short-term credit lines secured by investors’ capital commitments. They enable funds to promptly grab investment opportunities without waiting for capital calls from investors. This approach offers flexibility in deal execution and can improve internal rates of return (IRR) by reducing the time capital remains idle.
Net Asset Value (NAV) Facilities
NAV-based financing allows funds to borrow against the value of their existing investment portfolios. This type of facility provides liquidity for various purposes, such as supporting portfolio companies, making follow-on investments, or distributing returns to investors. NAV facilities are particularly beneficial for mature funds with substantial appreciated assets.
Hybrid Facilities
Combining elements of both subscription lines and NAV facilities, hybrid facilities are secured by both uncalled capital commitments and the fund’s asset portfolio. They offer enhanced flexibility, accommodating funds throughout different stages of their lifecycle.
Benefits of Fund Finance
Enhanced Liquidity Management
These facilities provide immediate access to capital, enabling funds to act swiftly on investment opportunities and manage cash flows efficiently.
Streamlined Capital Calls
By utilising credit lines, funds can consolidate capital calls, reducing administrative burdens and providing predictability for investors.
Potential for Improved Returns
Strategic use of leverage can amplify investment returns, benefiting both fund managers and investors.
Considerations
While fund finance offers significant advantages, it’s essential to consider associated costs, such as interest expenses and fees. Additionally, funds must manage the risks related to leverage and ensure compliance with loan covenants and regulatory requirements.
At Turning Point, we specialise in providing comprehensive fund finance solutions tailored to the unique needs of investment funds. Our expertise and extensive network of over 290 lenders enable us to connect clients with the most suitable financing options, facilitating efficient capital management and supporting investment strategies.
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Whether its assisting with access to lenders, structuring a facility, or taking away all the heavy lifting, we’re here to help. To find out more about our fund finance solutions please use our contact form or email us at contactus@tp.finance.
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Explore insights and updates on fund financing strategies, capital call facilities, and liquidity solutions for private market funds. Our articles cover trends, case studies, and best practices to help fund managers optimise capital deployment and enhance investor returns.